Sustainability is key

ECONOMIC growth in Papua New Guinea is not sustainable despite Prime Minister Peter O’Neill’s statement at the PNG Mining and Petroleum Conference in Sydney that “…economic growth and sustainable development can go hand-in-hand”.
From analysis of that statement, O’Neill was logical but failed immeasurably to provide any policy or framework for achieving sustainable economic growth or an example of such policies or framework in PNG.
In fact, economic growth had slowed down in 2016 to around 2.2 per cent compared to earlier growth rates of 13.3 per cent in 2014 and 9.9 per cent in 2015.
This showed a stiff declining trend in per capita aggregate output in the space of three consecutive years which is perhaps a sign of severe economic downturn, unsustainable economic growth and a drastic decline in economic well-being of citizens.
This trend is drastically worsened by a population growth rate of 3 per cent and inflation rate of 6.5 per cent which surpasses the rate of economic growth of 2 per cent in 2016 and projection of 2.8 per cent in 2017.
Though there has been increased capital investment and trade activities spurred by the PNG LNG Project which had contributed to the envious growth records between 2013 and 2015, there was minimal technological diffusion, transmission and transformation which provided the downside to economic growth.
The proposed cyber optic cables that were proposed to be installed along the PNG LNG project corridors have never eventuated and technical skills transfer to locals has been minimal amongst other downside factors.
Structural transformation stemming from the PNG LNG project also remains stagnant as reflected by the government’s inability to open up road networks in and around the PNG LNG project corridors to bolster industrial growth in areas such as farming, tourism and logging activities capitalising on the PNG LNG project and the proposed cyber optic cables installation.
This is because the PNG LNG project and the proposed cyber optic cable installation have the capacity to take agriculture and industrial activities to the next dimension as shown by the recent efficiencies in the Chinese agricultural and industrial systems and practices.
Although ExxonMobil PNG is investing heavily in business development activities in communities along the project corridors, expansion remains unattainable due a lack of efficient structural conditions, especially infrastructure.
On the other hand, socio-economic transformations in trade and industrialisation and urbanisation plans currently remain in oblivion.
Given the volatile global economic climate and the varying economic growth rates of different global economies, PNG should refocus attention to shift trade activities to industries that have comparative advantages to offset inefficiencies in the volatile industries.
As a responsible government, the O’Neill Government should provide the policies and sustainable economic growth frameworks rather than bringing in investors and then expecting sustainable growth to automatically happen.

Mike Haro, Via email